Gentrification Trends in the United States, 1970 - 2010 Richard W. Martin , Department of Insurance, Legal, Studies, and Real Estate , Terry College of Business , University of Georgia , 206 Brooks Hall , Athens, GA 30602 . Email: [email protected] Abstract This paper proposes a methodology that will allow for using Census data to measure the incidence of gentrification across a large cross - section of U.S. cities and across multiple decades. The met hodology is used to measure gentrification activity for 52 U.S. cities for each decade from 1970 to 2010. The results make it possible to evaluate changes in both the incidence and geography of gentrification in the United States between 1970 and 2010. T he paper’s results indicate that gentrification was at its lowest level in the 1970s and peaked in the 1990s. Additionally, the largest increases in gentrification activity in the 1980s were for cities in the Northeast while Midwestern cities experienced the largest increases in the 1990s. Finally, gentrification levels in the 2000s, while lower than the levels in the 1990s, were still significantly higher than the levels in both the 1970s and 1980s. Keywords Gentrification, Neighborhood Change, Historic al Analysis, Regional Shifts 1 Introduction This paper provide s a quantitative analysis of gentrification in the largest cities in the United States from 1970 to 2010. In doing so, the paper begins to fill a gap in the current gentrification literature. To date, there are no p ublished papers that provide a cross - sectional, historical perspective on the incidence of gentrification in the United States. Towar d this end, the paper has three primary goals. First, it will sug gest a methodology for identifying gentrifying neighborh oods that can be implemented across a relatively large sa mple of cities as well as at different points in time. Second, it will deter mine whether gentrification has become more or less common over time and quantify the extent to which gentrification level s have fluctuated. Finally, it will identify any significant changes in the geographic patterns of gentrification in the United States between 1970 and 2010. The primary goal of the paper is to provide a better historical understanding of the incidence a nd location of gentrification. The paper will begin by reviewing the relatively small number of papers in the literature that attempt to quantify gentrification. Next, the paper will outline the methodology that will be employed in this paper to measure g entrification and then use the methodology to measure gentrification in U.S. cities from 1970 to 2010. In identifying gentrification the focus will be on identifying how common the types of neighborhood income changes associated with gentri fication are . The final section of the paper will summarize the paper’s conclusions and provide suggestions for future research. Literature Review While gentrification has been heavily studied since the 1970s and the amount of existing research on the topic is massive, to the author’s knowledge ther e are no published studies that 2 provide an historica l, quantitative analysis of the subject. 1 T he goal of this paper is to provide such an analysis . In doing so, one of the biggest challenges is that of developing a definit ion of gentrification that can be used to quantify gentrification in a relatively large cross - section of cities and that can also provide an historical persp ective on gentrification. The development of a purely quantitative measure of gentrification is not without controversy. In their recent article Kreager, et. al (2011) suggest that census - based measures of gentrification suffer from two primary flaws. The first is that census - bas ed measures frequently identify solidly middle - and upper - income neighborhoods as gentrifying (Bourne, 1993a, 1993b) . Secondly, they state that census - based measures of gentrification: “generally lack the detail required to identify gentrification proces ses as they occur on the ground. Neighborhood changes in average economic and population characteristics are likely to overlook local housing and business developments that are central to the gentrification process.” In other words, gentrification is a process that involves both quantitative and qualitative changes in a neighborhood. There are measurable changes in a neighborhood such as increases in average household income, the increased presence of college - educa ted residents , and increases in housin g values and rents for which census data is very useful. However, there are also changes in characteristics such as the local retail mix that census data does not measure and for which good quantitative measures either do not exist or require some form of fieldwork that makes comparisons across cities and, more importantly, at different point s in time extremely difficult. While acknowledging that a purely quantitative approach to gentrification will not capture all of the dimensions of the gentrification p rocess, this paper seeks to generate a quantitative definition that captures the main elements of the process. The measurable components of gentrification are likely to be highly correlated with the more qualitative, aesthetic changes 1 See Lees. et. al (2008), for a comprehensive review of the gentrification literature. 3 associated with gent rification. Additionally, the paper will argue that the benefits from providing a cross - sectional, historical study of gentrification outweigh what is lost from being unable to fully capture the street - level changes that are associated with the gentrifica tion process. Even if the methodology that will be proposed below is not a perfect measure of gentrification, employing the same methodology across cities and across time periods should still provide useful insights into the historical patterns of gentrif ication. Additionally, the problem of misidentifying middle - and upper - income neighborhoods when using census data can be easily avoided by adequately controlling for which neighborhoods have the potential to gentrify and which ones do not. Specifically, gentrification, at its roots, involves the movement of higher - income households into traditionally low - income neighborhoods. Because of this, gentrification should only be possible in low - i ncome neighborhoods. Thus , the identification of gentrifying nei ghborhoods should be a two - stage process. First, the set of neighborhoods in which gentrification could take place should be identified. Then, once the set of “gentrifiable” tracts has been identified, further analysis should determine which of t he se gen trifiable tracts have experienced gentrification. While there are very few quantitative studies of gentrification, there are several articles in the literature that follow this approach of i dentifying “gentrifiable” tracts before measuring gentrification . The earliest attempt to quantify gentrification using census data can be found in Hammel and Wyly (1996 ). This paper is actually a hybrid between field research and a Census - based approach . The study is limited to Minneapolis - St. Paul and the authors use field research to identify neighborhoods that are “gentrifying” or “maybe gentrifying”. They then develop a set of Census variables that are likely to be associated with the gentrification process and identify the variables that do the best job of ide ntifying the gentrifying neighborhoods. 4 The authors employ a “two - step” approach as was described earlier in that only tracts with median incomes below the central city median income are eligible to gentrify. Among these tracts the main criteria for determining whether or not a tract has gentrified is the level of visible reinvestment activity. The authors specifically look at the number of blocks within a census tract that have an “improved” housing unit and the percentage of structure s on the block that show “evidence of reinvestment”. Gentrifiable census tracts in which a majority of the blocks contain an improved housing unit and one - third of all structures show evidence of reinvestment are deemed to have gentrified. Once the gentrifying tracts a re identified, the authors develop a set of socioeconomic, housing, and population variables and test how well the various variables distinguish between gentrifying and non - gentrifying tracts. In their final analysis the authors end up with a set of nine Census variables that do the best job of discriminating between gentrifying and non - gentrifying tracts. These variables are: (1) Median household income at the end of the time period (2) Change in median household income during the time period (3) Percent of workers employed in managerial, professional, and technical occupations at the end of the time period (4) Change in median rent during the time period (5) Median rent at the end of the time period (6) Change in median house value during the time period (7) Percentage of person s 2 5 and over with 4 or more years of college at the end of the time period (8) Number of employed persons at the end of the time period 5 (9) Number of persons at the end of the time period Since this paper is a hybrid of field research and quantitative analysis, it i s possible to use the methodology to provide a cross - sectional, historical analysis of gentrification. However, the key contribution of this work for the purposes of this paper is identifying a set of census variables that are strongly correlated with gen trification. One curious aspect of their choice of variables is the large number of “end of time period” variables. These variables represent outcomes of the gentrification process and, thus, are not useful for identifying which gentrifiable neighborhood s g entrify and which ones d o not. 2 Bostic and Martin (2003) also study gentrification at the census tract level. Their study represents the first published study to measure gentrification using a cross - section of cities. Using the Neighbo r hood Change Dat abase, the authors built a sample that includes all of the census tracts in the metropolitan statistical areas of the 50 largest cities in the United Sta tes as measured by their population in 1970.